NEW YORK (CNN/Money) -
Consumers' demand for imported goods pushed the U.S. trade gap to its second highest monthly reading on record, according to a government report Friday, as the deficit grew more than Wall Street expectations.

The Commerce Department reported that the trade gap was $58.3 billion in January, up from a revised $55.7 billion figure for December. It was the second-largest gap behind only the November 2004 reading of $59.4 billion.

Economists surveyed by Briefing.com had forecast the gap would rise to $56.8 billion from the initial December reading of $56.4 billion.

Once again, U.S. exports were strong, rising slightly to a record level of $100.8 billion from the previous record of $100.4 billion in December. A weaker dollar, which helps the competitiveness of U.S. exports, helped in this regard.

But imports grew faster, even as the value of oil imports, one of the largest categories of imports, fell by $1 billion. The volume of crude oil imports edged up 0.5 percent in the month, but the average price paid declined by 3.5 percent.

That decline in oil imports was more than offset by a $1.9 billion increase in the value of consumer goods imported. Electronics, such as televisions and VCRs, saw one of the bigger jump in imports, rising $330 million, or 12 percent, in the month compared to December.

Close behind was cotton apparel, which saw a $281 million, or 8 percent, increase. Quotas on the imports of cotton apparel from China were removed at the beginning of the month.

Overall, the gap in goods traded with China increased to $11.5 billion from $9.9 billion in December, by far the largest deficit with any single trading partner. The trade gap with all of the OPEC nations came to $4.7 billion, up slightly from the $4.6 billion in December despite the drop in oil imports.

Who is hurt by trade gap?

Federal Reserve Chairman Alan Greenspan downplayed the importance of the trade gap in a speech in New York Thursday evening to the Council on Foreign Relations. He said that the nation's federal budget deficit was a greater threat to future economic growth than the trade deficit or the nation's low savings rate.

Greenspan repeated an earlier argument that the trade gap can be controlled by market forces. He said a growing trade deficit will produce a weaker dollar, which in turn will raise the prices of imports and lower the prices of exports enough to limit the imbalance.

"The budget deficit is not readily subject to correction by market forces that stabilize other imbalances," he said.

But other economists said that trading partners such as China are interfering with those market forces by supporting the value of the dollar and keeping the value of their own currency low in order to support their exports to the United States.

"China's purchases of dollars create a 33 percent subsidy on its exports, and are having a devastating effect on U.S. workers with only a high school education or only some college or technical training," said University of Maryland Professor Peter Morici. "Were foreign governments to stop manipulating currency markets, the trade deficit would be cut in half. (That) would increase GDP growth to about 5 percent a year and create as many as five million additional new jobs over the next three years."

The widening trade put downward pressure on the dollar once again Friday, as it was trading lower against the euro and the yen. It had been higher against those currencies before the report.

"My suspicion is the value of the dollar has to continue to weaken," said Anthony Chan, senior economist with JPMorgan Fleming Asset Management. "Until we see further reduction in the value of the dollar, we won't be turning the ship around."

In his speech Thursday, Greenspan said he felt continued declines in the value of the dollar will be gradual, which should prevent any shock to the U.S. economy. Chan agreed that was likely, based on history, but it's not certain, posing a risk to the economy if there is a sudden drop.

Chan said that Greenspan's comments shouldn't be taken to mean that the Fed or the chairman don't care about the trade deficit.

"He's saying so far there is sufficient flexibility that we can tolerate a higher deficit than we could 10 years ago. He didn't say ignore it," said Chan.

Even with the weaker dollar, the United States had a positive flow of goods with only a handful of countries, with the Netherlands leading the way at $777 million more in U.S. goods exports there than imports, far more modest than the negative trade gaps with many trading partners.

But the greatest U.S. strength in trade is in services, not goods, which are not included in this initial nation-by-nation break down. Overall the U.S. export of service came to $29.6 billion, or $4.0 billion more than imported services.